Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our User Agreement and Privacy Policy.

Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our Privacy Policy and User Agreement for details.

4.
SUPPLIERS POTENTIAL ENTRANTS SUBSTITUTES BUYERS INDUSTRY COMPETITORS Rivalry among existing firms Bargaining power of suppliers Bargaining power of buyers Threat of new entrants Threat of substitutes COMPLEMENTS The suppliers of complements create value for the industry and can exercise bargaining power Five Forces or Six? —Introducing Complements

6.
The Contribution of Game Theory to Competitive Analysis <ul><li>Main value: </li></ul><ul><li>Framing strategic decisions as interactions between competitors </li></ul><ul><li>Predicting outcomes of competitive situations involving a few, </li></ul><ul><li>evenly-matched players </li></ul><ul><li>Some key concepts: </li></ul><ul><li>Competition and Cooperation—Game theory can show conditions </li></ul><ul><li>where cooperation more advantageous than competition </li></ul><ul><li>Deterrence—changing the payoffs in the game in order to deter </li></ul><ul><li>a competitor from certain actions </li></ul><ul><li>Commitment—irrevocable deployments of resources that </li></ul><ul><li>give creditability to threats </li></ul><ul><li>Signaling—communication to influence a competitor's decision </li></ul>Problems of game theory: Useful in explaining past competitive behavior—weak in predicting future competitive behavior. What’s the problem? — Multitude of models, outcomes highly sensitive to small changes in assumptions

7.
A Framework for Competitor Analysis <ul><li>PREDICTIONS </li></ul><ul><li>What strategy changes </li></ul><ul><li>will the competitor </li></ul><ul><li>initiate? </li></ul><ul><li>How will the competitor </li></ul><ul><li>respond to our strategic </li></ul><ul><li>initiatives? </li></ul>OBJECTIVES What are competitor’s current goals? Is performance meeting there goals? How are its goals likely to change? STRATEGY How is the firm competing? ASSUMPTIONS What assumptions does the competitor hold about the industry and itself? RESOURCES & CAPABILITIES What are the competitors’ key strengths and weaknesses?

15.
Strategic Group Analysis <ul><li>A strategic group is a group of firms in an industry that follow the same or similar strategies </li></ul><ul><li>Identifying strategic groups: </li></ul><ul><ul><li>Identify principal strategic variables which </li></ul></ul><ul><li>distinguish firms. </li></ul><ul><ul><li>Position each firm in relation to these </li></ul></ul><ul><li>variables. </li></ul><ul><ul><li>Identify clusters. </li></ul></ul>